When people mess with botany in the design sort of way, you either get a sculpted garden or a jungle feeling. The former can be as totally enthralling as the Jardins du Château de Versailles, but at the economic cost of having to be manicured constantly and at the ecological expense of being and appearing highly artificial.
The less obviously intrusive design is the hallmark of the organic approach, which appears to be working well enough on the business side for Green Studios, a recent Lebanese entrepreneurial venture. Green is so ueber-in as a corporate marketing mantra that it is almost prohibitive to trust a company that comes bearing a green moniker on its forehead. But you can trust the business story of the Green Studios venture to be solidly rooted in the most traditional art of shaping and uplifting the human environment with greenery: they design and deliver rooftops and walls that resemble green fields and gardens. “We are a local startup of four major partners, each coming from a different discipline,” said Jamil Corbani, chief executive of Green Studios.
The twist is that the partners in Green Studios have approached this conventional business with some novel homegrown research and development (R&D), a patent (how rarely does a reporter hear of new patents made in Lebanon), and have sprouted from zero revenues to profitability in only the company’s second year, with a net income of slightly over $100,000 on revenues of $471,000 in 2011.
For the current business year, (which ends on August 30), Green Studios predict a year-on-year increase of 17 percent in revenues to $550,000 and 7 percent net income hike to $110,000. Corbani said revenues and gross profits from September 2011 to February 2012 jumped 300 percent when compared with the same period in 2010 to 2011, implying that the company made a huge leap in the second half of its fiscal 2011. Green Studios was incorporated on September 1, 2009.
The elements driving their growth spurt were initial market exposure through the Project Lebanon exhibition in June 2010, registration of its patent in April 2011, winning of an entrepreneurship award from the Beirut Traders’ Association and Bank Audi in June 2011, and landing a green wall project with the Lebanese benchmark developer, Solidere.
“As soon as we registered the patent we were well positioned for business,” Corbani said. He called the win of the first prize in the Beirut Traders’ Grow My Business (GMB) competition “super important” for boosting the team’s morale and for building the company’s momentum, in combination with the contract for the green wall in the Sweat Tea hospitality establishment in the Beirut Souks, the flagship commercial development of Solidere.
Working on the Sweat Tea project with a renowned French landscape architect and expert in green walls provided Green Studios with a huge learning experience, Corbani said. The company furthermore established contacts with a German firm, ZinCo Green Roof, which holds a number of patents in the technology. According to Corbani, Green Studios will collaborate with ZinCo on green roof technology for hot climates. Joachim Stroh, a spokesperson for ZinCo, confirmed to Executive that the two companies had signed a letter of intent.
The German firm, which has activities in about 40 countries and on its website claims to be a global market leader in the technology of green installations, eyes the Arab market for expansion, Stroh said.
Remarkably, the evolution of Green Studios did not, at least not initially, involve any market research or business plan. It was more of an existential move, as his spouse’s determination to have the couple’s first child in Lebanon motivated Corbani to look for an entrepreneurship opportunity in their home country where he could use his training as an economist and experience in hydroponics and agriculture. Linking up with friends versed in architecture, landscape architecture and agricultural engineering, led to the establishment of the company.
Each contributed modest financial capital — the company’s description in the business outline submitted to GMB put its combined common equity and additional paid-in capital at $106,000 — with Corbani the largest single shareholder at 46 percent. The partners split their investment capital equally between R&D into hydroponics and plants on one hand and landscape design capabilities on the other hand. The firm’s operational bases are a nursery in Tabarja, north of Beirut, and a small design office in the Beirut suburb of Antelias.
According to Corbani, the firm’s competitive edge lies in its specialization in green installations in hot climates. Its patent is for a “skin”, the plantable surface that can be mounted on a wall or roof to make it a green wall or roof.
The market size that Green Studios sees in Lebanon is only a rough guess. “We estimate that three percent of landscaping jobs are high-end jobs and that five percent of these high-end landscaping jobs are up for grabs [for the company]. This gives you a target to reach $3 million to $4 million annually after five years,” Corbani said.
In pursuing its long-term commercial aims of becoming a leader in green installations suitable for hot weathers, the company now wrestles with two objectives of doing more R&D and acquiring more business through regional expansion of operations. “Our main concern is how we will really balance these two, because we are very young and have time to grow,” Corbani said.
Balancing growing and growth
He aims to achieve the balance by registering several patents in the United States and through establishing a base outside of Lebanon as a platform for the next growth stage. “Then strategically I would be interested to team up with an American or Japanese company that is willing to enter into the hot-weather markets. I want to have such a partner.”
In the meanwhile, Green Studios is competing for work on high-end residential projects in Lebanon like the Beirut Terraces, an apartment tower scheduled for construction across from the Phoenicia InterContinental and Monroe hotels in the central district.
By midyear, work is also expected to start on a green roof for one block of the Hamra head office of Banque du Liban (BDL), Lebanon’s central bank. The initiative is a collaboration of BDL and the United Nations Development Project’s (UNDP) energy efficiency support program for Lebanon, dubbed Cedro.
Cedro-UNDP has taken the project through its preparatory phases to the point where three competitors for the project have been short-listed — a joing bid by Green Studios and ZinCo among the three — and the contract is to be awarded and execution to commence within two months from end of April, according to Cedro-UNDP Project Manager Hassan Harajli.
The project is for an intensive green installation with about 80 percent greenery and 20 percent recreational space for central bank employees, and thus fits the high-end categorization. Harajli told Executive he could not provide an estimate of the project’s value, but added that UNDP had allocated a budget and the BDL had committed to filling eventual funding gaps.
According to Harajli, Cedro will use the project to measure the green roof’s energy savings effect on the heating and cooling of the very active BDL floor located beneath, as a case study for energy efficiency.
But it is also a standard-setting project and for that reason the UNDP applied very stringent selection criteria on the qualification of contractors. Harajli said, “It is the first time doing a green roof of this size on a public building in Lebanon. We can’t get it wrong.”